A Leon County circuit judge has ordered the Florida Division of Administrative Hearings to resume deciding Citizens Property Insurance Corp. claims disputes, after a Hillsborough County circuit judge halted the process in August.
The ruling Friday by Leon County Circuit Judge Jonathan Sjostrom was a victory for Citizens, which contends it is entitled by state law to arbitrate claims disputes at the Division of Administrative Hearings.
But it conflicted with the Aug. 1 ruling by Hillsborough Circuit Judge Melissa Polo, who issued a temporary injunction against the arbitration process because she said it is likely unconstitutional. Citizens appealed Polo’s decision to the 2nd District Court of Appeal, where the case is pending.
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Sjostrom’s ruling came in a case involving a different Citizens policyholder, Elmer Lombana, than in the Hillsborough case, where the policyholder was Martin Alvarez. But both cases challenged the constitutionality of the arbitration process, which Citizens has used to resolve disputes rather than going through regular lawsuits.
In his six-page ruling, Sjostrom said the Legislature in 2023 gave authority for Citizens, which was created as the state’s insurer of last resort, to resolve disputes through arbitration. He also wrote that Lombana had agreed to arbitration in his policy terms.
“It seems unnecessary to recite the authorities suggesting deference to the legislative policy-making role in these circumstances,” Sjostrom wrote. “Indeed, the reason property owners have access to policies through Citizens is because of the Legislature’s determination that otherwise, no coverage would be available at all. These circumstances do not suggest that the purchase of a Citizens policy is involuntary or coerced, at least not by Citizens or by the government generally. Plaintiff Lombana accepted the arbitration clause by accepting the policy issued pursuant to statute.”
Sjostrom also wrote that he did not have to defer to the injunction issued by the Hillsborough judge. He ordered the Division of Administrative Hearings to resume arbitration proceedings, except in the case of Alvarez.
“Alvarez was not a class action and there is no suggestion in this record that Lombana or Lombana’s insurance policy was in issue in Alvarez, nor was DOAH impleaded in that case to address its statutory mandate,” Sjostrom wrote. “This court is not bound by the non-final orders of other trial courts addressing other insurance claims of different policy holders.”
In her Aug. 1 ruling, Polo wrote that Alvarez “demonstrated a substantial likelihood of success” on his arguments that the arbitration process violates part of the Florida Constitution designed to ensure access to courts.
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“Plaintiff also established that he and similarly situated Citizens policyholders will suffer irreparable harm absent injunctive relief,” Polo wrote. “Specifically, enforcement of the arbitration clause at issue compels insureds (policyholders) into a forum that lacks neutrality, discovery, motion practice and meaningful judicial review.”
Lawmakers passed the Citizens arbitration measure in 2023 as the insurance industry and many Republican leaders blamed litigation for driving up homeowners’ premiums and causing carriers to drop customers. But opponents of state moves aimed at curbing lawsuits have long argued that changes have hamstrung policyholders in fighting to get claims paid.
Citizens said in a news release Monday that Sjostrom’s ruling allows the Division of Administrative Hearings to move forward with more than 400 arbitration cases that have been stalled because of Polo’s injunction.
The ruling came after Citizens last month asked for what is known as a writ of mandamus to require the Division of Administrative Hearings to resume arbitration. The Division of Administrative Hearings supported the request, while Lombana’s attorney opposed it.
“This court (Sjostrom) should not permit the continued attack on an order of another court, just as that court would not interfere with the issuance of an order of this court,” Lombana’s attorney, Lynn Brauer, wrote in a Nov. 7 document.
